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Verenex confirms oil and gas discovery in Libya at H1-47/02 well

CALGARY, Jan. 12 /CNW/ - Verenex Energy Inc. ("Verenex" or the "Company")
(TSX - VNX) is pleased to provide an update of its operations in Libya and to
confirm an oil and gas discovery at the H1-47/02 new field wildcat ("NFW")
exploration well in Area 47 in the Ghadames Basin. The H1 discovery is the
Company's tenth oil and gas discovery in Area 47 since drilling began in
September 2006. The Libyan National Oil Corporation ("NOC") has also announced
this discovery.
The Company also advises that since the last operational update on
November 12, 2008, the I1-47/02 NFW exploration well (well No. 16) was
successfully tested, the J1-47/02 NFW exploration well (well No. 17) was
drilled and cased and is preparing to test, the K1-47/02 NFW exploration well
(well No. 18) was drilled and is currently being cased and the L1-47/02 NFW
exploration well (well No. 19) was spudded on January 2, 2009 and is currently
drilling.
H1-47/02 NFW Exploration Well Confirmed as Oil and Gas Discovery
The H1-47/02 NFW exploration well (well No. 15) is located approximately
8.0 kilometres north of the Company's nearest oil and gas discovery at
E1-47/02 in Block 2 and was drilled and cased to a depth of 10,475 feet in the
Memouniat Formation. The Company carried out successful extended flow tests on
the H1 well from a total of 155 feet of perforations in three sandstone
intervals, including a 73 foot interval in the Memouniat Formation and two
intervals totalling 82 feet in the Lower Acacus Formation. The tests yielded a
combined maximum measured flow rate, as restricted by test equipment
capability, of approximately 1,315 bopd (gross) of light sweet crude oil and
16.2 mmcf/day (gross) of natural gas through choke sizes on particular
intervals ranging from 32/64ths to 48/64ths inch. Measured API gravity of the
crude oil ranged from 42 to 64 degrees.
At the request of the NOC, and consistent with earlier test protocols,
flow rates were also measured through a smaller more restrictive choke size of
32/64ths inch which yielded combined oil and gas flow rates of 1,021 bopd and
17.7 mmcf/day (gross), respectively, as shown below.
H1-47/02 Flow Test Rates at 32/64ths Inch Choke Size
-------------------------------------------------------------------------
Depth Form- Perf- Restricted Oil Gas Flowing Oil
at ation orated Choke Rate Rate Wellhead Gravity
Top of Interval Size (bopd) (mmcf/ Pressure (degrees
Perfor- (feet) (inches) day) (psia) API)
ations
(feet)
-------------------------------------------------------------------------
10,170 Memouniat 73 32/64ths 496 10.62 2,023 64
-------------------------------------------------------------------------
8,290 Lower 57 32/64ths 246 0.34 349 42
Acacus
-------------------------------------------------------------------------
8,036 Lower 25 32/64ths 279 6.77 1,863 44
Acacus
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The Company believes that the oil flow rates from the two Lower Acacus
intervals are not representative of the capacity of these intervals and were
negatively impacted by water production from a separate underlying water zone
that flowed behind casing due to a poor cement job over part of the Lower
Acacus Formation. Analysis of the cement bond log and subsequent temperature
and spinner surveys confirmed this interpretation.
The H1-47/02 well is significant from two standpoints. Firstly, it
extends the Lower Acacus play fairway further to the northeast in Block 2.
Secondly, it is the third tested liquids-rich gas and condensate discovery in
the Memouniat Formation in Area 47 and has extended the area of the Memouniat
play fairway such that it is now considered a primary exploration target
together with the Lower Acacus.
To-date, ten NFW exploration wells and two appraisal wells have tested at
a maximum aggregate rate of approximately 99,320 bopd of oil and 92.7 mmcf/day
of natural gas (gross). These wells have been suspended as potential future
oil and gas production wells.
I1-47/02 NFW Exploration Well Successfully Flow Tested
The I1-47/02 NFW exploration well (well No. 16) was drilled and cased to
a depth of 10,925 feet in the Memouniat Formation. Testing operations
utilizing the KCA DETAG Service Rig 32 were recently completed in two
intervals, including a 44 foot perforated interval in the Memouniat Formation
and a 40 foot perforated interval in the Lower Acacus Formation. Test results
and confirmation of well status will be released following the normal review
by the NOC.
The I1-47/02 well is the first well drilled in the Central 3D seismic
survey area in the north-western part of Block 2 south of AGOCO's G1-NC02 oil
and gas discovery. The positive results extend both the Lower Acacus and
Memouniat play fairways into the north-western part of Block 2.
J1-47/02 NFW Exploration Well Drilled and Cased and Preparing to Test
The J1-47/02 NFW exploration well (well No. 17) was drilled and cased to
a depth of 11,420 feet in the Memouniat Formation over a period of 39 days
from spud to rig release. The J1 well is located in the southern part of Block
2 approximately 6.0 kilometres northeast of the Company's A1-47/02 oil and gas
discovery and 3.0 kilometres west of the F1-47/02 oil and gas discovery.
Extensive formation evaluation results indicated the presence of
hydrocarbons in two sand intervals in the Lower Acacus Formation (Basal Sand 1
and Upper Shoreface). In Basal Sand 1, the results indicated a thick oil
column of approximately 66 feet with an underlying water oil contact that is
at a different subsea depth than the contacts found in the A1 field and F1
well suggesting that the J1 structure may be isolated. Testing may assist in
confirming this interpretation. Basal Sand 1 contains the majority of the
contingent resources in the A1 field and in other fields in the southern part
of Block 2.
The Company plans to test the J1 well commencing in late January 2009.
K1-47/02 NFW Exploration Well Drilled and Currently Running Casing
The K1-47/02 NFW exploration well (well No. 18) is located in the
north-western part of Block 2 approximately 6.3 kilometres south of the
I1-47/02 well. The well was drilled to a final depth of 10,965 feet in the
Memouniat Formation and is currently being cased.
The well encountered oil shows in the Lower Acacus and very strong gas
shows in the Memouniat Formation and in what appears to be a highly fractured
zone in the Tanezzuft Basal Hot Shales. This is an encouraging result because
the Tanezzuft Hot Shales contain the organic rich source rocks for
hydrocarbons in the Lower Acacus and Memouniat Formations and is a potential
oil and gas resource play in its own right.
The Company expects to test the K1 well following testing of the J1 well.
L1-47/02 NFW Exploration Well Drilling
The L1-47/02 NFW exploration well (well No. 19) spudded on January 2,
2009 with Ensign Rig No. 28. The L1 well is located approximately 5.0
kilometres southeast of the A1-47/02 oil and gas discovery on a prospect
identified on the new 2008 2D seismic.
Verenex is a Canada-based, international oil and gas exploration and
production company with a world-class discovered resource base and exploration
portfolio in the Ghadames Basin in Libya. Under the EPSA terms for Area 47,
Verenex is the operator and holds a 50% working interest in the initial 5-year
Exploration Period which reduces to 25% for any commercial developments
retained in a subsequent 25-year Exploitation Period. These working interest
levels reflect the Company's required share of capital funding during the
periods. In any commercial development scheme, Verenex would fund 25% of
capital expenditures and 6.85% of operating costs and receive an initial
production allocation (free of all taxes and royalties) of 6.85%. A more
complete description of the Area 47 contract terms is included in the
Company's various filings on www.sedar.com.
This press release contains forward-looking statements, including but not
limited to operational information and future exploration and development
plans. These statements are based on current expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to: financing risks; geological
risks; drilling risks; risks associated with obtaining regulatory approvals;
oil and gas industry operational risks in development, exploration and
production; the uncertainty of resource estimates; delays or changes in plans
with respect to exploration or development projects or capital expenditures;
the ability to attract and retain key personnel; the risk of commodity price
and foreign exchange rate fluctuations; the uncertainty associated with
negotiating with governments; and the risk associated with international
activity. Due to the risks, uncertainties and assumptions inherent in
forward-looking statements, prospective investors in the company's securities
should not place undue reliance on these forward-looking statements.